The release of the U.S. National Intelligence Assessment on Iran
received top billing in major media. The Jerusalem Post headlined
"US: Iran Stopped Its Nuclear Arms Program 4 Years Ago". Ha'aretz
reported that PM Ehud Olmert, FM Tzipi Livni, and Defense Minister
Ehud Barak were briefed on the report's content while in Washington
last week. According to the paper, GOI sources in Jerusalem told
the newspaper on Monday that the Bush administration appears to have
lost its sense of urgency towards Iran's nuclear program, making a
military strike in 2008 increasingly unlikely. The Jerusalem Post
reported that Israeli and American concerns over Iran's nuclear
program are not alleviated. Israel Radio, which cited initial
satisfaction in Jerusalem over the U.S. report, quoted senior
Israeli defense sources as saying that the picture has not changed
and that 2009 remains a critical date for the program. Yediot,
which quoted Israeli defense experts as saying that the only
difference between the U.S. and Israel lies in interpretation and
that the report is a blow to Israel's attempts to convince the world
an urgent solution is needed before Iran reaches the point of
no-return.

Ha'aretz quoted PM Olmert as saying on Monday that he hoped to reach
an agreement with the Palestinians as soon as possible even though
he has refused to set a time line. "We refused to set target dates,
but we want to hold negotiations at the pace required, to try to
reach an agreement as quickly as possible," he was quoted as saying
at a meeting with Kadima Knesset members. Olmert emphasized that
Annapolis was not a meeting for negotiating or reaching a deal, but
that it was certainly an important opportunity to start talks to
reach an agreement on Kadima's basic platform: two states for two
peoples. He added, however, that there are stumbling blocks to be
overcome. "We do not belittle either the difficulties or the
chances; neither the uncertainty nor the lack of necessary responses
that we still consider vital, which the Palestinian leadership must
meet." Ha'aretz also reported that at the meeting FM Livni gave a

positive assessment of the results from Annapolis.

The Jerusalem Post reported that Israel, the PA, and the U.S. are
working to launch three parallel tracks to keep the Annapolis
process alive and active: (1) bilateral negotiations; (2)
implementation of the Roadmap, including the U.S. monitoring
mechanism; and (3) encouraging Arab countries and the international
community to produce a favorable regional environment for advancing
a two-state solution.

Secretary of State Condoleezza Rice was quoted as saying on Monday

SIPDIS
in an interview with The Jerusalem Post that she sees a "strong
desire" in Israel to aid Palestinian economic development, though
she acknowledged the difficulties posed by security concerns.

Israel Radio reported that last night the IAF bombarded a Hamas
target in the central Gaza Strip. The radio quoted Palestinians as
saying that two people were killed and two others were wounded on
the hit of a suspected training base. The radio reported that
another Hamas activist was killed in a clash with the IDF.

Ha'aretz reported that Health Ministry officials confirmed to
Ha'aretz on Monday that Israeli hospitals are no longer authorized
to schedule medical appointments for Palestinians without first
providing the security services with the patients' names for
vetting. The policy change requires hospitals to disclose patients'
profiles to the Coordinator of Government Activities in the
Territories, (COGAT), which is a unit in the Defense Ministry that
is entrusted with coordinating civilian issues between the
government, the IDF, international organizations, diplomats, and the
PA. Only after patients are approved by the security services are
hospitals allowed to summon the patients for an appointment inside
Israel. A Health Ministry official told Ha'aretz that the procedure
is designed to prevent infiltration by suicide bombers via bogus
appointments. Ha'aretz quoted Physicians for Human Rights-Israel as
saying that the new policy constitutes another hurdle that sick
Palestinians will have to overcome in order to receive basic medical
treatment for their conditions.

Maariv reported that in the last few days security at the Prime
Minister's offices in the Knesset has been increased. Shin Bet is
apparently concerned that the offices could be attacked with
rockets.

The Jerusalem Post and Israel Radio cited a Hamas denial of Red
Cross reports that Gilad Shalit may be allowed to receive visits by
the international organization or correspond with his family.

Israel Radio reported that the Yesha Council of Jewish Settlements
in the Territories plans to thwart Defense Minister Barak's
compensation plan for settlers if they leave the West Bank.

The Jerusalem Post and other media quoted the Indian press as saying
that the September launch of an Israeli spy satellite from India,
which now faces months of postponement, was canceled due to
"last-minute" pressure by the U.S.

The Jerusalem Post quoted Israeli and Palestinian officials as
saying that Israel has held up the transfer of 25 Russian armored
vehicles to Palestinian police in the West Bank, because the
Palestinians want to have them mounted with machine guns.

The Jerusalem Post reported that Peace Now charges that thousands of
structures in scores of West Bank settlements are illegal and that
demolition orders for them have been ignored. It further alleges
that public officials as well as construction companies were
involved in the illegal construction.

Leading media quoted Olmert as saying at the Knesset on Monday that
the government will provide communities living under the threat of
missiles the necessary defensive measures, but it will not make an
unlimited investment in such means. His remarks came in response to
criticism at the way authorities handled the home front during the
Second Lebanon War.

Leading media reported that contradicting the PA's view, Egypt
allowed 700 Palestinians to leave through the Rafah crossing for the
hajj. Ha'aretz cited the PA's concern that Hamas activists would
take advantage of the religious occasion to reach training camps in
Iran and Lebanon. The Palestinians' travel was not coordinated with
Israel, which only heard about it afterwards.

Leading media reported that on Monday the Jerusalem District Court
sentenced Hamdi Quran, who assassinated cabinet minister Rehavam
Zeevi in 2001, to two life terms plus 100 years in prison.

Ha'aretz reported that U.S. "Marranos," who believe that their
ancestors were Jews who fled Spain and Portugal during the 15th
century, are seeking a home in Israel, but that they are not
welcome.

---------

1. Iran:
---------

Summary:
--------

Diplomatic correspondent Aluf Benn and Washington correspondent
Shmuel Rosner wrote in the independent, left-leaning Ha'aretz:
"However successful or flawed [the new U.S. intelligence] report
may be, there is a new, dramatic reality, in all aspects of the
struggle against the Iranian bomb: The military option, American or
Israeli, is off the table, indefinitely."

Military correspondent Alex Fishman wrote on page one of the
mass-circulation, pluralist Yediot Aharonot: " Israel has no
intention of either slowing or stopping its efforts [against the
Iranian nuclear program]. Only now we are going to be, maybe, a bit
more on our own."

Historian and defense expert Dr. Cellu Rosenberg wrote on page one
of the nationalist, Orthodox Makor Rishon-Hatzofe: "The American
intelligence agency would do well to put pressure on the President
and on the Secretary of State to adopt a heavy-handed policy against
Iran."

Block Quotes:
-------------

I. "The End of the Military Option"

Diplomatic correspondent Aluf Benn and Washington correspondent
Shmuel Rosner wrote in the independent, left-leaning Ha'aretz
(12/4): "Intelligence officers, like anyone else, 'are reluctant to
change their minds' and admit they made a mistake or were caught by
surprise. So the U.S. intelligence services should be given credit
for trying to correct their mistake.... Professionals will now argue
passionately, continuing the debates between Israel's assessment (an
Iranian bomb in 2009-2010) and the American one (a bomb in
2012-2013). The Americans failed to explain on Monday how they
reached their new conclusions.... It does not really matter.
However successful or flawed this report may be, there is a new,
dramatic reality, in all aspects of the struggle against the Iranian
bomb: The military option, American or Israeli, is off the table,
indefinitely."

II. "Coping Alone"

Military correspondent Alex Fishman wrote on page one of the
mass-circulation, pluralist Yediot Aharonot (12/4): "There can be no
doubt that the folks in Tehran are celebrating. [The new U.S.
intelligence] report was a blow ... to the fight that Israel has
been waging in the international arena against the Iranian nuclear
program..... The Israeli security establishment does not understand
where the Americans got the information as if the Iranians decided
to suspend their nuclear weapons production program in 2003 and have
not renewed it since. The information the Israeli espionage
agencies have, which is the same information that the Western
espionage agencies have, is that the Iranians, under diplomatic
pressure, indeed suspended the process of producing fissionable
material for military purposes in 2003. However, that information
also stipulates that the Iranians renewed that process some two
years later and that that process has continued to this very day.
Officials in the Israeli security establishment have been careful
not to argue publicly with the leaders of the American espionage
agencies, but behind closed doors Israeli officials are convinced
that the American agencies are simply mistaken in their
assessments.... Security officials stress that Israel will continue
to adhere to its ... assessments. Even if there is a disparity of
information with the Americans, Israeli officials say, the two sides
are in full agreement on the core issue: the connection between the
current regime in Iran and its determination to obtain nuclear
weapons is a danger to world peace.... Israel has no intention of
either slowing or stopping its efforts. Only now we are going to
be, maybe, a bit more on our own."

III. "American Fantasy"

Historian and defense expert Dr. Cellu Rosenberg wrote on page one
of the nationalist, Orthodox Makor Rishon-Hatzofe (12/4):
"Apparently Iran is continuing with its plans, with the help of
anti-Western countries, i.e., Russia and China, and any American
attempt, even by the famous intelligence agency, not to take this
seriously and postpone the inevitable, is not very respectable. The
American intelligence agency would do well to put pressure on the
President and on the Secretary of State to adopt a heavy-handed
policy against Iran. The sooner the pressure is levied, the better
for everyone. And if this pressure does not help, the U.S. must ...
employ a great military force to chop down the terrifying Iranian
regime."

------------
2. Mideast:
------------

Summary:
--------

Peres Center President Uri Savir wrote in Yediot Aharonot: "Contrary
to many others, I am convinced that such an agreement can be reached
even earlier than the end of 2008.. The key lies with the
leadership on both sides."

Yossi Ben-Aharon, who was director-general of the Prime Minister's
Office under former prime minister Yitzhak Shamir, argued in the
popular, pluralist Maariv: "There can be no doubt that the Americans
will ... present demands by which Israel does not want to or cannot
abide."

Columnist Calev Ben-David wrote in the conservative, independent
Jerusalem Post: "[Defense Minister Ehud] Barak's call for a
[settler] compensation bill is a classic flanking move, at least in
the public relations sphere."

Peace Now Secretary-General Yariv Oppenheimer wrote in Maariv:
"Following the Annapolis meeting, the Prime Minister is obligated to
... check whether Syria is willing to reach an agreement based on
the principles of the peace treaty with Egypt."

Foreign affairs commentator Adar Primor wrote in the independent,
left-leaning Ha'aretz: "[The new British] administration, together
with that of President Nicolas Sarkozy in France and Chancellor
Angela Merkel in Berlin, has created in the trinity of the main
capitals of Europe a rare constellation of support for Israel."

Block Quotes:
-------------

I. "How to Achieve a Breakthrough"

Peres Center President Uri Savir wrote in Yediot Aharonot (12/4):
"From my acquaintance and conversations with the Palestinians I am
convinced that the Abu Mazen-Fayyad-Abu Ala [Ahmed Qurei] troika can
lead to a permanent status agreement following intensive
negotiations that would resolve core issues.... Contrary to many
others, I am convinced that such an agreement can be reached even
earlier than the end of 2008.. The key lies with the leadership on
both sides. I admit having been impressed by Olmert's appearance
and performance.... If we do not want to find ourselves in a few
years facing Hamas and Al-Qaida, the government must adopt a
strategy that serves Israel's interests -- in this case,
strengthening Abu Mazen through diplomatic negotiations, along with
jointly fighting terror."

II. "A Dangerous Statement at Annapolis"

Yossi Ben-Aharon, who was director-general of the Prime Minister's
Office under former prime minister Yitzhak Shamir, argued in the
popular, pluralist Maariv (12/4): "The Annapolis statement says that
a three-way U.S.-led security mechanism will be created to implement
the Roadmap, as the American side plays the role of an arbiter
monitoring implementation by both sides. This clause has dealt a
harsh blow to Israel's status as a sovereign state and laid
potential mines in the negotiations. There can be no doubt that the
Americans will later present demands that Israel will not like or
will be unable to meet."

III. "Barak's West Bank Maneuvers"

Columnist Calev Ben-David wrote in the conservative, independent
Jerusalem Post (12/4): "[Defense Minister Ehud] Barak's call for a
[settler] compensation bill is a classic flanking move, at least in
the public relations sphere.... If Barak is serious about the
measure, it's likely part of a broader political strategy in line
with recent political reports that he may be looking for Labor to
incorporate at least parts of Meretz in its fold prior to the next
elections, offering voters a single clear alternative on the Zionist
Left in a field split with a weak Kadima in the center and Likud as
part of the fractured Right.... But [Barak] will also have to
confront a settler community, and their supporters, determined not
to surrender the right to claim new ones -- and Barak won't be able
to buy his way out this challenge."

IV. "A Chance for Syria to Disconnect from Iran"

Peace Now Secretary-General Yariv Oppenheimer wrote in Maariv
(12/4): "Syria's decision to return to the negotiating table with
Israel is bold and dramatic .... Following the Annapolis meeting,
the Prime Minister is obligated to leave aside assessments and
commentaries and check whether Syria is willing to reach an
agreement based on the principles of the peace treaty with Egypt....
If [Syria] stays out of the diplomatic process, it will return to
the fold of Iran and sow the seeds of the next war along Israel's
northern border."

V. "A Penguin in Pace of the Poodle"

Foreign affairs commentator Adar Primor wrote in the independent,
left-leaning Ha'aretz (12/4): "In [Gordon] Brown's new lexicon, one
says fighting poverty and cluster bombs -- instead of radical Islam;
multilateralism -- instead of a single-power world and a 'network of
alliances' -- instead of a 'special relationship' with the United
States. In Israel no one is upset by this analysis. First of all,
it is said, the difference between Brown and Blair boils down to
style, not essence.... While Blair continues to stand out in the
international arena as the Quartet's envoy to the region, presumably
Brown -- who at the moment is in any case bothered by scandals at
home that are shaking up his party -- will also in future leave his
Foreign Secretary David Miliband more rope than was left to his
predecessors. As far as Jerusalem is concerned, this is good
news... Miliband, and ultimately Brown as well, are faithful to the
British tradition of Euro-skepticism and pro-Americanism. Their
administration, together with that of President Nicolas Sarkozy in
France and Chancellor Angela Merkel in Berlin, has created in the
trinity of the main capitals of Europe a rare constellation of
support for Israel."

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